Business Entities and Transactions
Choosing the right entity for a business or investment requires careful analysis of both tax and non-tax issues. Those entities most commonly used are limited liability companies, corporations and limited partnerships. Each of them should be considered at the outset.
Here are some of the questions we ask in that process:
+ Will the business have a single owner or multiple owners?
+ Will the owners include family members, trusts or other business entities?
+ Will the new entity engage in operating a business or merely serve as a passive investment vehicle?
+ How will the business be capitalized?
+ Will the business have few or many employees? Will any of those employees be offered an ownership interest?
+ What is the strategy for exiting from the business or investment?
Often, changes in circumstances will require a re-structuring of a business entity. If the business is raising capital, adding an owner, retiring an owner or preparing for sale, the form of organization may have to be changed to provide the optimal tax and legal structure. Likewise, if an entity contains a family business, and the owners wish to transfer the business to other family members (either during life or after death), pre-transfer restructuring will often be necessary to achieve the family’s goals for optimal management and ownership of the business by next generation.
At CSBB, we have the unique ability to create an integrated plan starting with the selection of the appropriate entity which marries income and estate and gift tax planning with an efficient legal framework for operating a business or owning an investment.